Minimum wage boost for workers

More than a million workers will see their pay rise from today, as
this year's minimum wage increase comes into force.

In addition up to six million workers will also benefit from an
increase in the amount of annual paid leave that UK staff are
legally entitled to, the government has said.

The adult rate for the statutory minimum wage will rise from
£5.35 to £5.52 an hour and from £4.44 to £4.60
an hour for 18 to 21-year-olds.

For 16 and 17-year-olds the minimum wage will increase from
£3.30 to £3.40 an hour.

Meanwhile all full-time workers in the UK will be entitled to at
least 24 days paid holiday a year, up from the 20 days previously
granted. The level of annual leave entitlement is also set to
increase again in April 2009 – to 28 days a year.

Employment relations minister Pat McFadden claimed that businesses
would benefit from a more motivated and productive workforce as a
result of the changes.

"These changes will improve the lives of millions of British
workers, giving them more time with their families and ensuring our
lowest paid workers continue to be able to earn a living wage," he
stressed.

Last week the Trades Union Congress (TUC) also welcomed the minimum
wage increase as a "much-needed boost to the pay packets of
millions of low paid workers".

"Unions would have liked a bigger increase, but at this level there
is nothing for businesses to complain about. The UK economy can
easily afford a larger minimum wage increase next year," said TUC
general secretary Brendan Barber.

However new research published today by the British Retail
Consortium (BRC) claims that last year's minimum wage increase cost
retailers £1.7 billion, 13 per cent more than expected.

In addition to financing the higher rates of basic pay, the BRC
says that some £200 million of the total cost was due to
retailers having to find extra money to maintain pay differentials
among staff as a result of the rise.

BRC director general Kevin Hawkins said: "Past minimum wage
increases have appeared to emerge from an attempt to balance
competing bids from business and unions rather than being genuinely
based on economics.

"Future increases should be guided much more closely by increases
in median earnings in sectors, including retail, which are most
affected by the minimum wage," he added.

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